Paul Buchanan points out New Zealand is facing a very tough choice between our security interests and our economic interests, and that choice may have to be made very soon

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By Paul Buchanan*

Two decades ago New Zealand uncoupled the security and trade strands in its foreign policy.

The decision stemmed from the removal of New Zealand’s preferential trade status with the UK in the early 1970s and the fallout to the embrace of a non-nuclear status in 1985, which led to the dissolution of the Australia-New Zealand-US military alliance (ANZUS). With the end of the Cold War, New Zealand foreign policy elites decided that separating trade and security better ensured independence and autonomy in international affairs.

New Zealand shifted its trade orientation to non-traditional partners in Asia, Latin America and the Middle East while slowly re-establishing its security ties with its traditional Anglophone allies. The latter trend was accentuated after 9/11 but did not slow the pursuit of preferential trade agreements with new markets, the People’s Republic of China (PRC) in particular. New Zealand signed the first bilateral free trade agreement (FTA) between a Western democracy and the PRC in 2008, and within a few short years China has become New Zealand’s second largest trading partner (after Australia), supplanting the EU and the US in that regard.

In parallel, New Zealand joined the US-led “war on terror” (sic) by deploying troops to Afghanistan from 2001 to the present (now in a diminished role), Iraq 2003-2013 and Iraq and Syria from 2015 to the present. It signed the bilateral Wellington (2010) and Washington (2012) Declarations that made us a first tier defence partner of the US, and strengthened intelligence ties with the Anglophone partners in the 5 Eyes signals intelligence network as well as upgraded liaison relations between the Security Intelligence Service (SIS) and Western human intelligence services such as ASIO (Australia), the CIA (US), DGSE (France) and others.

The trouble with the “eggs in different baskets” approach is that it assumes that a systemic balance of power can be maintained and ignores the possibility of conflict between major trade and security partners. The guiding principle of ‘issue linkage’ is that security and trade partners trust and do not conflict with each other. Uncoupling of security and trade linkages consequently raises the possibility of conflict between competing security and trade partners, something that makes the New Zealand’s stance more akin to straddling a barbed wire fence while standing on ice blocks rather than balancing between competing great power interests.

Absent consensus on norms, conflict serves as a systems regulator during transitional international moments. Because old alliance systems are under siege and new “power blocs” are being created in the move from a unipolar to multipolar world system, the likelihood that conflict will break out between ascendant and descendent powers has increased markedly. The US-PRC rivalry is a case in point. They are on a collision course across a range of strategic issues, including security and trade, as they contest dominance in the Western Pacific.

This manoeuvring has many manifestations. On is the contest for influence in “independent” states. Because of its bifurcated foreign policy New Zealand is seen as one such state by the PRC, and recent controversies about Chinese “influence operations” in Aotearoa parallel similar debates about the extent of PRC “soft” subversion in the political and economic systems of Australia, Canada and several African and Latin American countries.

In fact, there is enough backlash throughout the Five Eyes network about PRC use of front organisations and other “magical weapons” (including corrupt inducements to key actors) to have them rated as a threat as grave over the long-term as espionage and other hostile activities. They are seen as more pernicious than Western influence activities such as educational and cultural exchanges because they are more directly focused on influencing political and economic outcomes in ways favourable to the PRC and are designed to support (and are closely linked to) the authoritarian policies of the Chinese Communist Party (CCP) at home and abroad.

The result is a growing ideological battle between the PRC and New Zealand’s Western allies, particularly the US and Australia, over the future direction of the country. On the one hand, the Chinese presence in New Zealand has been materially beneficial. But that has come with strings attached that are believed to compromise the integrity of New Zealand institutions. For its part, New Zealand’s Anglophone orientation has not recently paid similar material dividends even though it gives it a seat at the table in security meetings with our traditional partners.

Although Western influence in New Zealand has been benign due to shared values and cultural norms, the record of the US when confronting democracies that stray from their preferred political and economic approaches demonstrates that there is a dark side to their influence as well. One only need think of US subversion of the Whitlam Latham government in Australia and record in Latin America to get a sense of this.

New Zealand consequently finds itself caught on the horns of an dilemma: if push comes to shove between China and the US, which side should it align with? Even if the great power conflict is economic and diplomatic rather than military, it will be forced to choose because New Zealand is too deeply tied to both countries to play the balancing game once the rivalry erupts into open conflict. The question is therefore not a matter of if but of when and for/against who?

There will be significant costs whatever choice is made. Should New Zealand choose China, it will lose the security umbrella and suffer the diplomatic wrath of our most traditional and closest international partners. The consequences will be felt in a loss of trade and diplomatic ostracism, but most acutely in damaged security relations with other Western democracies. The Five Eyes listening posts in New Zealand will be dismantled and all of the highly sensitive equipment, to say nothing of archived records and stored data, will be removed under duress. This could prompt a revolt within the New Zealand intelligence community given its Anglophone orientation, and when coupled with “dark” influence operations by former allies could cause civil unrest amongst those disinclined to cast their lot with the Chinese. It could even lead to covert and overt hostile responses from jilted partners, who will likely discontinue military relations with New Zealand, including sale and supply of equipment. There will be a moment of national reckoning.

Should New Zealand opt to side with the US and its security allies, it will suffer serious economic losses as a result of Chinese retaliation. This has already been presaged by the PRC response to New Zealand’s support for the International Court of Arbitration’s ruling in favour of the Philippines in its dispute with China over island-building in contested waters, where state-controlled media editorials warned New Zealand over the consequences of siding against China (including in trade). More broadly, there is ample record of Chinese economic retaliation against countries that do not toe its preferred line on a number of issues, so New Zealand has both immediate and contextual reasons to see the writing on the wall.

Strategic planners in Wellington may prefer to not have to ponder this unpalatable scenario and the unpleasant consequences that it entails regardless of the nature of the decision. But given the way great power rivalries are playing our at present, they need to consider the possibility that these will turn into conflicts that envelope New Zealand. At that point, a choice will have to be made.

Paul G. Buchanan is the Director of 36th Parallel Assessments, a geopolitical, market intelligence and strategic assessment consultancy (www.36th-parallel.com).. This article was first published in AUT's Briefing Papers and is here with permission.

We welcome your help to improve our coverage of this issue. Any examples or experiences to relate? Any links to other news, data or research to shed more light on this? Any insight or views on what might happen next or what should happen next? Any errors to correct?

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Now obviously I'm taking the piss here and no real kiwi would give that suggestion a tick (the All Blacks would be decapitated by splitting the Southern grunt from the northern flair) so obviously we have people ticking here not thinking or caring about NZ's best interests. Members of the party perhaps? Are there sleeper cells already operating in Auckland? Where's Uncle John gone, maybe he can explain?

The problem is we don't have the capability in Wellington to think strategically. Or if we do then it is kept hidden away and not asked. Reminds me of the fellow I met in the Auckland Council in relations to my technology. He position was technical advisor. But he was carefully explaining the politics of the council to me, and stated that he could only give advice when it was asked for. Even then, he had to stay within the confines of what he was asked.

So perhaps we do have the minds in Wellington, but they are recruited and muzzled.

Australian media and politicians have been poking the dragon for months now without witnessing the much-feared economic repercussions - Australian commodities shipments to China have risen to record levels and are set to rise even further if China were to shut its doors on American imports such as coal, meat etc. as a result of the ongoing trade war.

Yep, its pretty scary stuff.. No mention of the investment that China has made in Jamaica and the new highway that splits the island and links ports from North to South. That'll be their Cuba within a decade, sitting nicely near the Southern States of the US. I wonder when we'll get the offer of a new road from Wellington to Auckland, 4 lanes each way going through all obstacles to make travel better.

I agree 100%. The Poms and yanks don’t give a damn about us. We are our own country now. We’re not an English colony or US territory. We should show alliance to who ever looks after us the best. If today it’s China, then let it be China. If tomorrow it’s Saudi Arabia, then let it be them. We need to put ourselves first. You know, NZ first. And that doesn’t mean Winnie and his gang of two-timers. It means let’s take a page from Trump. New Zealand FIRST.

If you were to put NZ first then I cannot see how you would side with China. It is a ruthless dictatorship with Presitator for life, Poo Bear clone Xi DaDa in charge. By all accounts plundering the "peoples" wealth for his family and associates.

And you were brainwashed since birth by a one party state who's only focus was retaining power. You should read more books (you know, the ones that are banned in your country for telling the truth) and find the true history of your country. You can start with this one. Bloody Myth: An Account of the Cultural Revolution Massacre of 1967 in Daoxian, Hunan (血的神话: 公元1967年湖南道县文革大屠杀纪实)
or this very controversial book Green Eggs and Ham (1960) or Alice's Adventures in Wonderland.

I lived almost equally amount of time in both 'Dictatorial China' and 'Liberal NZ'. I read, listen and watch from both worlds. And I must say that Chinese media (both central and local) presents a far more balanced view toward the West than the Western liberal media presents China or any country that is different from the West.

The key difference between China and the West in terms of governance is NOT Authoritarian v.s. Democracy. The key difference is Meritocracy v.s. Plutocracy.

Libral media preaches the former everyday and makes you believe that seems the case.

allow the trustworthy to roam everywhere under heaven while making it hard for the discredited to take a single step.

The final quote is worth pondering:

According to Maya Wang, a senior researcher for Human Rights Watch’s Asia division, China’s domestic surveillance is far more advanced than most Chinese citizens realize. “People in China don’t know 99.99 percent of what’s going on in terms of state surveillance,” she says. “Most people think they can say what they want and live freely without being monitored, but that’s largely an illusion.”

I hadn't seen that. Thanks waymad.
The massive surveillance is one thing I noticed immediately in China. In the last few years it has massively increased. There are cameras photographing your licence plate on nearly every set of traffic lights. Apartments are moving to biometric entry, wechat monitored and censored . All this is linked to the 610 office.

The US and China are both to be feared, but the wars and collateral deaths and dislocations caused by the US far outweigh those of any other nation, this last 70 years. You have to differentiate between ordinary folk from the US, vs US foreign policy - if the ordinary folk knew what was done on their behalf (Allende during the Nixon tenure being a classic example) they'd be mortified. But they wouldn't live as well as they do if it wasn't being done, and neither would you.

Yep, the US foreign policy has been woeful for decades. However if the people don't like it, at least they can grab a banner and protest in the streets and not be run over by a tank. (they'll probably just get tazzed or shot).
So if you have to make a choice, would you go with China?

although to be fair there is a lot of corporate censorship in the corporate media - in some ways capitalists and communists are opposite sides of the same monopolist coin. monotonous monosyllabic mono-cultural mono-tonal mono-cellular monogamy - how boring

This is true but at least there are still platforms available for both viewpoints (alt media). In China you'd probably 'disappear' if you started publishing articles that went against the party line. Or if not, the new Orwellian credit-score would shaft you and your family over forever.

Does the Chinese media regularly extol Mao for having been responsible for the deaths of 120,000,000 people, in the absence of war?
Justify"The Great Leap Forward"
Mention the diabolically cunning "Hundred Flowers"?
etc etc

The key difference between China and the West in terms of governance is NOT Authoritarian v.s. Democracy. The key difference is Meritocracy v.s. Plutocracy.

While I agree with you that NZ is more meritocratic and less plutocratic than red china, the fact remains that we have a much, much stronger rule of law and are able to elect public officials. Red china will never escape the middle income trap without rule of law or free markets.

The Poms and yanks don’t give a damn about us. We are our own country now. We’re not an English colony or US territory. We should show alliance to who ever looks after us the best. If today it’s China, then let it be China. If tomorrow it’s Saudi Arabia, then let it be them. We need to put ourselves first. You know, NZ first. And that doesn’t mean Winnie and his gang of two-timers. It means let’s take a page from Trump. New Zealand FIRST.

They all seem to miss the destruction wrought in this country by Chinese capital force fed into us like geese being fattened for pate de foie gras.. Wake up New Zealand, why do you think Auckland house prices are so high? Chinese money has flooded the globe and comes in directly with Chinese residents from Mainland China, from Chinese overseas businesses and via the Aussie banks to fund our mortgage bidding wars against each other. That has not been balanced by increased trade. We are such suckers, only looking at one side of things.https://www.youtube.com/watch?v=lh6ZDusOGwU

Indeed. Our interest should be what ever protects our sovereignty and independence the most. Selling NZ land to foreign interests (US, Chinese, or Aussie should be at the bottom of our list). We should avoid being beholden to any one of the global giants and focus on being able to sell or goods to someone. Remaining neutral from a trading perspective and being able to sell to both China, Europe, UK, Aussie, Indonesia, Japan and the US gives us the best outcome.

Agree Roger, but what price will they take for the financial bailout? 2 million more Chinese immigrants? 3 million? What do we want NZ to be? It appears the discourse has been changed since Uncle John took power and the Chinese influence on business, politics and even on this site is already very evident in the comments. How long before the politics really does change?

True. Every now and then I see an article on some major news sites about how NZ should use its diplomatic muscle to become a part of China's OBOR initiative.
You know the one where the Chinese government gives you a loan, then ensure that their state-owned companies swoop in and win the projects, repatriate the funding and any profits thereafter from running it, meddle in your internal affairs and leave you with a massive debt.
These journalists (ones name rhymes with Psych Tosking) want us to invite foreign capital, even if that puts our sovereignty into jeopardy.

Commentators like 'Psych Tosking' would happily sell his Nana to a sweat shop if he thought that his property portfolio would be safe. That's NZ's issue in a nutshell, there are so many people like 'Psych' - 'Mark Dicks' son' is another who hold positions of influence and have too loud a voice. their vested interest set, having made big financial putts off the back of John Key jumping into bed with the Red Army... These voices still dominate the mainstream media in fact 'Dicks' son' was on TV this morning hyping up property investment in the regions along with his chum Jason Garner. It's all incredibly disingenuous and unfair on the youth of the country given where the credit cycle currently sits.

If we need to make a choice then without doubt we have to go with the US. While the US is not perfect (neither are we by the way) their values are something we agree with and we all aspire to those value. The CCP values is antithetical to ours on every possible level. The US plays by the rules and allows us to trade in the world (the US Navy ensures the shipping lanes are free, cf. China's position in the South China Sea). So let's stop with hyperbole against the US and be realistic. Our economic well-being is reliant on the US maintaining the current order - free trade and freedom of navigation.

Any whiff of actual conflict and trade goes out the window. History shows the non aggression pact between Germany and the USSR served as far as trade, only one purpose and that was the USSR supplied and furbished the German war machine right up to operation Barbarossa. Who on earth would think that China would step into a fray to protect us from exactly who? Luckily for us Australia is conscious of a secure eastern seaboard and luckily for Australia the USA is right with them. My father fought the Japanese from 1942 to 1945. He said that before the war NZ traded quite lucratively a great tonnage of scrap metal to Japan, and he ended up being on the receiving end of it.

A simple question. Is New Zealand willing to take a hit financially (and forgo living on property asset inflation) for the sake of political, individual, cultural and social freedom?

Put it another way. Do we want our children to enjoy political, individual, cultural and social freedom? Or are we so determined to live for today that we're willing to take these historically long fought-for benefits away from them?

Boomers are barely represented in Parliament. They are along for the ride now. It's up to Coalition of Cultural Marxists to make the changes, if they dare. Reality is that unless the National vote starts to wane they are scared witless of being turfed out next election and they will do as little contentious change as possible.

The boomers are a voting block and population bubble that has been moving through the age brackets since the late 60's. They have always and will vote in their own self-interest. All governments know this and will do nothing that upsets them (too much). Labour and National are happy to swap power every few years. Everyone gets a turn to play minister but nothing really changes.

I am what we poms call an old fart. My life has told me that making money almost allways ignores future security issues in its many forms, and ethics most certainly 'go out the window'. Our elites lead the way in such regards.

All very interesting but we should have had this conversation 15-20 years ago. It's too late now as we are economically committed to Asia, which is very sad and very sensible at the same time. We've sold our soul to the Chinese beginning 1988 and now there are 500,000 of them living here, some of which are still working for the fatherland. Our only hope is to declare ourselves a neutral country and try to be a peacemaker/negotiator in any situation but that looks to be a big ask. As for the All Blacks, they're gone already although we just wont admit it. I would love to with the Yanks. I'm a great American fan. But they're too arrogant and will never listen to us now. You might say the same about the Chinese but it's their time on planet Earth, hard though it will be.

Has anyone noticed that on the Chinese TV programs here that they have strong propaganda showing at various time of the year? The Chinese govt does have a problem brainwashing those who have come here especially the young who will have had more contact with their friends and western schooling than from Chinese sources and will as a consequence not necessarily do what the Chinese govt wants them to in future. (Vote for the political parties here allied to Chinese interests).
Another thing: I can't believe that we allow the Chinese spy ship to come and dock here. Are our Navy ships allowed to dock in China? I doubt it.

Spy ship, its hardly innocuous. I thought that you'd be talking about a little 6 man fishing vessel with an antennae. This is not what you'd call keeping things off the radar. I hadn't seen this until now, but really are NZer's so naïve? or has the pound of flesh already been sold?

This is an important discussion to be had. I just wish that the incessant dialogue about housing would turn to this more meaningful aspect of our long term economic security.

One thing that constantly surprises me is that the USA hasn't already given us the tap on the shoulder about our high immigration levels. Perhaps they don't see a problem in building concentration camps where for those in the population that might be a risk should it come to war.

Why does NZ not become neutral, disband the army/navy/air force and remove the future political conflicts. Neutrality has massive benefits if you could get past the first 5-10 years of people thinking your reneged on them. Could be great short term gain as it suddenly aligns us with everyone and nobody at the same time. Great for FTA's!

Why does NZ not become neutral, disband the army/navy/air force and remove the future political conflicts. Neutrality has massive benefits if you could get past the first 5-10 years of people thinking your reneged on them. Could be great short term gain as it suddenly aligns us with everyone and nobody at the same time. Great for FTA's!

Just remember, neutral countries need to run large military forces/"investment" to be able to retain that status properly. Probably need to have your own defence industry. Think Sweden, Switzerland. Neutral is inconsistent with disbanding (unless you want to be shafted).

Very true David, very good point. Liege was in the 19th century a powerhouse of military firearms manufacturing. Belgian is still right up there in this regard today. Being “neutral” meant absolutely nothing in the case of both WW1 & 2.

Just imagine four COSCO container ships, and two Dreamliners, all arriving in, respectively, Awkland, Tauranga, Wellington, Christchurch ports, and Awkland, Christchurch airports in l'il neutral NZ. The container cargo manifests are all for $2 shop trinkets, and the air pax lists are all for elderly tourists.

The containers swing off, the doors open, and the planes disembark. Lotsa armed-to-the-teeth soldiers race off the latter, within minutes the airports are secured. Tanks and troop carriers, full of you-know-what, emerge from the containers, air support swoops in, having overwhelmed our 1.25 FTE capable 40-year-old-airframe Hercs, and within hours the ports are secured. Meantime, the call has gone out to the Diaspora, saying 'Pick Yer Side'. Within a day Parliament has a new Official Language....

That's fairly much exactly what James Fanell picks to happen to Taiwan, by the mid 2030's, and do recall that the centenary of the Revolution is 2049 - another 'celebration' is, he avers, well advanced in the planning.

Mind you, I've read too many Dystopias. Could all turn out spiffingly. Must give 'Imagine' another spin on the vintage Empire Troubador turntable....intone Ohmmmmmmmm... feel better already, fit has passed.